Can an Aw franchisee transfer their Papa Ray's Pizza Restaurant without a concurrent transfer of the Franchise Agreement?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
Therefore, except as otherwise provided in Paragraph 14.5 below, neither the franchise, your Papa Ray's Pizza Restaurant or a substantial portion of the assets of your Papa Ray's Pizza Restaurant (or any interest therein) nor any part or all of the ownership of an entity that is the Franchisee may be voluntarily, involuntarily, directly or indirectly, assigned, sold, subdivided, subfranchised or otherwise transferred by you or your Owners (including, without limitation, by merger or consolidation, by issuance of additional securities representing an ownership interest in the Franchisee, or in the event of the death of the Franchisee or an Owner of the Franchisee, by will, declaration of or transfer in trust or the laws of intestate succession) without our prior written
approval. Further, neither your Papa Ray's Pizza Restaurant nor a substantial portion of its assets may be transferred without a concurrent transfer of this Agreement and the franchise rights granted hereunder to the same transferee. Any such assignment or transfer without our prior written approval will constitute a breach of this Agreement and will convey no rights to or interests in the franchise, the franchisee entity, your Papa Ray's Pizza Restaurant or its assets.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, a franchisee is not allowed to transfer their Papa Ray's Pizza Restaurant without also transferring the Franchise Agreement. Aw emphasizes that the rights and duties within the agreement are personal to the franchisee, and the franchise was granted based on the franchisee's specific character, skills, and financial capacity.
Therefore, a franchisee cannot transfer the restaurant or its assets without Aw's prior written approval and a concurrent transfer of the Franchise Agreement. Any attempt to do so without approval constitutes a breach of the agreement and will not grant any rights or interests to the transferee.
This policy ensures that Aw maintains control over who operates its franchises and that new operators meet their standards. For a prospective franchisee, this means that selling the restaurant requires finding a buyer acceptable to Aw and transferring the entire franchise relationship, not just the physical assets. This protects Aw's brand and operational consistency.
This requirement is typical in franchising, as franchisors want to ensure that any new operator is properly trained and financially capable of running the business according to Aw's standards. Franchisees looking to sell their business should be aware of this requirement and factor it into their exit strategy.